Your pocket will “suffer” a little more this year if you plan to travel by plane during the summer holidays. Among the main causes are high fuel prices, inflation, pent-up travel demand in the post-pandemic era and staff shortages at some airlines.
According to data from the Hopper flight booking site cited by NBC News, the average price of a domestic fare in the United States is now $330 round trip. That’s a 7% increase from the same period in 2019, and the highest average price since the site started collecting data.
“The airfare will continue to increase by 10% until May, at least on the $360 round tripHopper economist Hayley Berg wrote earlier this month.
Something similar happens with the international airfare which, on the other hand, is already equivalent to 2019 prices at US$810 for the entire route. “We expect international airfares to stay that way until May before go up to US$940 return in June, which is a 15% increase from current prices, before dropping seasonally through the fall,” Berg added.
The price of jet fuel is rising
Hopper’s experts predict that other factors, such as regular seasonal changes in demand, jet fuel prices, capacity and carrier competition, “will be the primary drivers of price action in the U.S. market.” .
The price of jet fuel, which is the second largest expense for airlines after labor, is up 158% from 2021 levels and 30% from just a month ago , to reach around $153 a barrel, according to the International Air Transport Association.
Meanwhile, travelers are flocking to airports. American Airlines CEO Robert Isom recently told his staff that they must do everything possible to maintain reliable service no matter what.
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“People really need to feel in control of their routes and we put them in control by making sure they get to when they want to go. I can’t be more upfront about that,” a- he told pilots last week in statements quoted by CNBC, where he also acknowledged the efforts of competing airlines.
Data from the Adobe Digital Economy Index published by Business Insider reveals that travelers spent $8.8 billion in online flight bookings in March, which is a 28% increase over the same period in 2019. While spending has increased, bookings themselves have only increased by 12%.
The same data indicates that in the first quarter of 2022, travelers spent $21 billion on domestic air tickets. To put that figure into perspective, a total of $56 billion was spent in 2021.
But Hopper expects airlines to properly manage the costs they will pass on to the end consumer and how much they expect to incur based on their coverage plans.
Some hedging strategies, such as that of Southwest Airlines, are used by airlines to avoid being harmed by unexpected increases in fuel. The company commits to buying fuel months or years in advance at a fixed rate, allowing it to offset rising costs.
Southwest covered about 64% of the fuel for the remainder of 2022, while rival American Airlines stopped doing so in 2014.
flights are delayed
Data from airline tracking website FlightAware.com shows that about a quarter of US flights are experiencing delays, while overall flight capacity is less than 16% of pre-pandemic levels.
Staff shortages continue to plague some airlines, forcing them to cut flight schedules. Among the airlines doing so is JetBlue, which saw more flights canceled between April 8 and April 17 than any other carrier.
Add to that rising inflation. “Consumers have seen online prices rise for physical goods for 22 consecutive months, and inflation is also becoming more prominent for services,” Vivek Pandya, principal analyst at Adobe, said in a statement.
“Pent-up demand has been a major driving factor as the desire to travel by air returns more aggressively than expected.” He also said that consumers should be aware that pandemic-era flight discounts are almost over.